For the Texas Personal Lines exam, the Personal Auto Policy (PAP) is tested two ways: the national policy structure and the Texas auto laws layered on top of it. This standalone guide covers both—the lettered parts every PAP uses, then the Texas-specific rules on financial responsibility, the tort system, PIP, uninsured motorist offers, and cancellation notices. Learn the Texas overlay especially well, because that is where the state questions live.

The national fundamentals (quick version)

The Personal Auto Policy insures individuals and families for the vehicles they own and drive. It is divided into clearly labeled parts:

• Part A — Liability Coverage: pays for bodily injury (BI) and property damage (PD) the insured is legally liable for, and includes a duty to defend with defense costs paid on top of the limit.
• Part B — Medical Payments: pays medical and funeral expenses for the insured and passengers regardless of fault.
• Part C — Uninsured/Underinsured Motorists (UM/UIM): pays your injuries when the at-fault driver has no insurance or too little.
• Part D — Coverage for Damage to Your Auto: Collision and Other Than Collision (Comprehensive), each with a deductible, paid at Actual Cash Value (ACV).
• Part E — Duties After an Accident or Loss and Part F — General Provisions set the rules.

An insured generally includes the named insured, the resident spouse, resident family members (including a child away at school), and anyone using the covered auto with permission. Eligible vehicles are private passenger autos, pickups, and vans not used primarily for business. That national skeleton is the same everywhere; Texas changes the limits and the legal environment around it.

Texas is an at-fault (tort) state

Texas uses a tort (at-fault) system, not a no-fault system. The driver who causes a crash is financially responsible, and the injured party recovers from that driver's liability insurance (or by suing). This is why liability coverage and financial responsibility dominate Texas auto law.

Texas applies modified comparative fault, often called the 51% bar rule: an injured person can recover damages only if they were 50% or less at fault, and the recovery is reduced by their share of responsibility. If a claimant is 51% or more at fault, they recover nothing. Expect the exam to contrast this with pure no-fault states.

Financial responsibility: the 30/60/25 minimums

Texas drivers must show financial responsibility, most commonly by buying liability insurance that meets the state minimum split limits of 30/60/25:

• $30,000 bodily injury per person
• $60,000 bodily injury per accident
• $25,000 property damage per accident

Texas markets this as "30/60/25." These are floor limits—agents routinely recommend higher. Proof of financial responsibility can also be shown through other state-approved methods (such as a surety bond or deposit), but auto liability insurance is by far the usual route. Driving without it exposes the owner to fines, license/registration consequences, and personal liability for damages.

PIP and Medical Payments in Texas

Texas requires insurers to offer Personal Injury Protection (PIP), a first-party, no-fault coverage that pays the insured's and passengers' medical expenses and a portion of lost wages regardless of who caused the crash.

• PIP must be offered with a minimum of $2,500; the applicant may choose higher amounts.
• PIP is automatically included unless the insured rejects it in writing. Memorize the "reject in writing" rule.
• Medical Payments (Med Pay) is a separate, optional coverage that pays medical and funeral expenses but, unlike PIP, generally does not include lost wages or essential-services benefits.

A common point of confusion: PIP and Med Pay both pay regardless of fault, but PIP is broader (wages + services) while Med Pay is medical-only.

Uninsured/Underinsured Motorist offer rules

UM/UIM protects the insured when an at-fault driver has no insurance or not enough. In Texas:

• UM/UIM must be offered and is added to the policy unless the insured rejects it in writing.
• It covers bodily injury, and Texas UM/UIM also includes a property damage component (typically subject to a deductible).
• The other driver must be legally at fault for UM/UIM to respond.

The recurring exam theme is the same as PIP: these coverages are not silently omitted—they are part of the policy unless waived in writing.

Cancellation and nonrenewal notice

Texas regulates how and when an insurer can end an auto policy, and the timelines are tested.

• Cancellation during the term generally requires the insurer to mail written notice at least 10 days before the cancellation takes effect.
• After a personal auto policy has been in force 60 days, the insurer may cancel only for specific permitted reasons—chiefly nonpayment of premium, a driver's license suspension/revocation, or fraud/material misrepresentation. It cannot cancel mid-term simply because it no longer likes the risk.
• Nonrenewal (declining to continue at the end of the term) generally requires at least 30 days' advance written notice so the insured can find replacement coverage.

These notice periods are a classic Texas exam target; do not confuse the 10-day cancellation notice with the 30-day nonrenewal notice.

Required vs. optional coverages in Texas

Key Texas numbers to memorize

Common exam traps

• Texas is at-fault, not no-fault. PIP exists, but it does not make Texas a no-fault state.
• 30/60/25—do not transpose the property-damage figure ($25k) with bodily injury.
• PIP and UM/UIM are on the policy unless rejected in writing—they are not buried options the insured must request.
• PIP includes lost wages and essential services; Med Pay is medical (and funeral) only.
• 10-day cancellation vs. 30-day nonrenewal—keep the two timelines straight.
• After 60 days, an insurer cannot cancel a personal auto policy for just any reason.
• The comparative-fault 51% bar: a claimant who is 51%+ at fault recovers nothing.
• Hitting an animal is still Other Than Collision (Comprehensive), the same as the national rule.

Quick recap

• The PAP keeps its national Parts A–F structure; Texas changes the limits and legal context.
• Texas is a tort/at-fault state using modified comparative fault (51% bar).
• Financial responsibility minimums are 30/60/25.
• PIP (min $2,500) and UM/UIM must be offered and apply unless rejected in writing; PIP adds lost wages, Med Pay is medical-only.
• Mid-term cancellation needs 10 days' notice; nonrenewal needs 30 days'; after 60 days cancellation is limited to nonpayment, license suspension, or fraud.
• Liability is required to drive; physical damage coverages are optional unless a lender demands them.